Amy Wicks and John Koblin at WWD have a great piece this morning that examines how Hearst Corporation’s budget-conscious ways has become the industry standard. Hearst Corp’s CEO Frank Bennack has a long history of preaching sensible spending and a no-frills approach that now has the company poised to pass one of its biggest rivals:
Now that there appear to be some signs of life in the beleaguered publishing world, Bennack’s parsimony has positioned Hearst to make a blockbuster deal. The company is on the verge of spending $700 million to $800 million to pick up the Hachette International portfolio from Lagardère that includes Elle, Elle Decor, Woman’s Day and Car and Driver (Lagardère would keep the French titles). The deal will make Hearst the second-largest magazine company in the U.S. in terms of circulation, audience and advertising, surpassing Condé Nast.
Also worth mentioning is that while Condé Nast has folded six magazines over the last few years, Hearst has shut down only a few.
Part of Hearst’s success can be traced to the company embracing television, say Wicks and Koblin. When Hearst launched Food Network Magazine, it was seen as a huge gamble, but now it is one of Hearst’s most popular titles. Hearst is planning on continuing that trend with debuting a magazine based on HGTV in the near future.
While touting a tight-fisted method might not be the best way to attract talent, it doesn’t appear to have hurt Hearst. The Hearst Tower on West 57th is like one big piggy bank, and Bennack’s penny-pinching ways have kept it full. Boring, but smart.